Eldorado Gold Corporation (“Eldorado” or “the Company”) is pleased
to announce its wholly-owned subsidiary, Hellas Gold S.A. has
entered into an amended Investment Agreement (the “Agreement”) with
the Hellenic Republic to govern the further development,
construction and operation of the Skouries, Olympias and
Stratoni/Mavres Petres mines and facilities in northern Greece
(collectively the “Kassandra Mines”). The Agreement
amends the 2004 Transfer Agreement between Hellas Gold S.A. and the
Hellenic Republic, and provides a modernised legal and financial
framework to allow for the advancement of Eldorado’s investment in
the Kassandra Mines.
The Agreement is mutually beneficial to Eldorado
and the Hellenic Republic. For Eldorado, it provides investor
protection mechanisms including a permitting framework similar to
other large-scale foreign investment agreements in Greece. For the
Hellenic Republic, it provides enhanced fiscal revenues,
environmental benefits, and community development
opportunities.
The Agreement includes an optimized Investment
Plan for the Kassandra Mines which will allow for:
- Completion of construction at
Skouries and transition of the project into production;1
- Expansion of Olympias to 650,000
tonnes per annum;2
- Upgrades to the port facilities at
Stratoni to allow for bulk shipment of concentrates;2
- Further investment in exploration
at Mavres Petres-Stratoni; and
- Continued study of on-site gold
processing methods.
The Agreement will be formally submitted to the
Greek Parliament for ratification, with a vote expected to take
place in an upcoming parliamentary session. The
Agreement takes effect once published in the Greek Government
Gazette, which follows parliamentary ratification.
“Today is a major milestone, marking a new
beginning for the Kassandra Mines and for Eldorado Gold in Greece,”
said George Burns, President and CEO. “This agreement is the
culmination of dedicated, determined efforts and reflects a true
desire from both parties to deliver a commercial framework that can
realize the potential of the Kassandra Mines for all stakeholders.
Both Olympias and Skouries have the potential to be tier-one assets
that, when combined with the rest of our portfolio, will be
transformational for Eldorado.
“We now have a modernized investment agreement
that will provide a stable, commercial path for Eldorado in Greece,
as well as a strong precedent for future investment in the country
once ratified by the Greek Parliament. Together, we are building a
positive legacy for generations to come as we continue to commit to
operating responsibly and with care for local communities and the
environment.”
Key Benefits of the
Agreement
- Investor protection mechanisms,
similar to other large-scale foreign investment agreements in
Greece;
- A permitting framework allowing for
a clear path to production and stable operations;
- Increased fiscal revenues for all
levels of government, including a 10% increase in royalty rates for
all contained metals3;
- Enhanced opportunities for local
communities, including the creation of approximately 3,000 jobs and
an $80 million commitment to community projects over the life of
the mines; and
- Reduced environmental footprint
through the use of best-available techniques (BAT) at the EU level,
as well as global best practices, such as dry-stack tailings,
improved water management systems and other design and monitoring
improvements.
Next Steps at Skouries
The Company is advancing several key pieces of
technical work on the Skouries project, including additional
engineering and feasibility-level updates to the capital cost
estimate. An application for dry-stack tailings was submitted to
the Ministry of Energy & Environment in late 2020 with approval
expected once the Ministry has completed its review. The Company is
continuing to evaluate financing options for Skouries. Once
re-started, the Company expects to complete construction in
approximately 2.5 years.
About Skouries Project
Skouries is a high-grade gold-copper porphyry
project that is partially constructed and currently in care and
maintenance. Skouries is expected to operate for approximately 23
years based on current reserves, initially as an open pit and
underground mine, followed by underground mining only.
Highlights of the project as outlined in the
Technical Report for Skouries dated January 1, 2018 include:
- Proven and Probable reserves of 3.8
million ounces of gold at 0.74 g/t Au and 1.7 billion pounds of
copper at 0.49% Cu, support a 23 year mine life at an average
annual production of 140,000 ounces of gold and 67 million pounds
of copper with production from both open-pit and underground.
- Estimated capital cost of $689.2
million, including $87 million in contingency, to fully develop
both the open pit and Phase I of the Skouries underground,
generating an estimated after-tax project NPV $925 million at a 5%
discount rate, an internal rate of return of 21.2%, and a payback
period of 3.4 years (at a gold price of $1,300/oz and a copper
price of $2.75/lb).
- The project design specifies a
dramatically-reduced environmental footprint reflecting some of the
best-available control technology, and utilization of filtered dry
stack tailings.
A copy of the Skouries Technical report can be
found here, or on SEDAR.
To take a virtual tour of the Skouries site, please visit:
https://vrify.com/explore/projects/45/sites/3147
About Olympias Mine
Olympias is a gold-silver-lead-zinc mine that
Eldorado refurbished and put back into production at the end of
2017. Olympias produced over 58,000 ounces of gold in 2020. The
Company’s current guidance shows production increasing to between
65,000 and 70,000 ounces of gold a year in 2023. Olympias has a
mine life of 21 years based on current reserves and outlined in the
most-recent Technical Report (dated December 31, 2017).
A copy of the Olympias Technical report can be
found here, or on SEDAR.
To take a virtual tour of the Olympias site, please visit:
https://vrify.com/explore/projects/75/sites/3145
About Eldorado Gold
Eldorado is a gold and base metals producer with
mining, development and exploration operations in Turkey, Canada,
Greece, Romania, and Brazil. The Company has a highly skilled and
dedicated workforce, safe and responsible operations, a portfolio
of high-quality assets, and long-term partnerships with local
communities. Eldorado's common shares trade on the Toronto Stock
Exchange (TSX: ELD) and the New York Stock Exchange (NYSE:
EGO).
Contacts
Investor RelationsJeff Wilhoit,
Interim Head of Investor Relations+ 1 604 376 1548 or +1 888 353
8166 jeff.wilhoit@eldoradogold.com
MediaLouise Burgess, Director
Communications & Government Relations+1 604 616 2296 or +1 888
363 8166 louise.burgess@eldoradogold.com
Dan Gagnier, Gagnier Communications+1 646
569-5897 dg@gagnierfc.com
Cautionary Note About Forward-Looking Statements and
Information
Certain of the statements made and information
provided in this press release are forward-looking statements or
information within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws. Often, these forward-looking statements and
forward-looking information can be identified by the use of words
such as "plans", "expects", "is expected", "budget", “continue”,
“projected”, "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or the negatives thereof or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved.
Forward-looking statements or information
contained in this release include, but are not limited to,
statements or information with respect to: the formal ratification
of the Agreement by Greek Parliament and effectiveness of the
Agreement, the benefits of the Agreement, the completion of
construction at Skouries, including transition into production, the
advancement of technical work at Skouries, including the approval
of dry-stack tailings, financing and completion of construction,
and the timing thereof, and expected reserves, mine life,
production, costs, NPV and design at Skouries, the expansion at
Olympias, the upgrade of port facilities at Stratoni, further
exploration at Mavres Petres-Stratoni, the continued study of
processing methods, and our expectations regarding the timing and
quantity annual gold production; our expectation as to our future
financial and operating performance, including expectations around
generating free cash flow; working capital requirements; debt
repayment obligations; use of proceeds from financing activities;
expected metallurgical recoveries and improved concentrate grade
and quality; gold price outlook and the global concentrate market;
risk factors affecting our business; our strategy, plans and goals,
including our proposed exploration, development, construction,
permitting and operating plans and priorities and related
timelines; and schedules and results of litigation and arbitration
proceedings. Forward-looking statements and forward-looking
information by their nature are based on assumptions and involve
known and unknown risks, market uncertainties and other factors,
which may cause the actual results, performance or achievements of
the Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements or information.
We have made certain assumptions about the
forward-looking statements and information, including assumptions
about: ratification and effectiveness of the Agreement, and the
benefits thereof, the ability to achieve the expected benefits of
the Agreement, the completion of advancement of technical work and
construction at Skouries, including securing financing, production
and cost guidance, and ability to move into production, and the
timing thereof, how the world-wide economic and social impact of
COVID-19 is managed and the duration and extent of the COVID-19
pandemic; timing and cost of construction and exploration; the
geopolitical, economic, permitting and legal climate that we
operate in; the future price of gold and other commodities; the
global concentrate market; exchange rates; anticipated costs,
expenses and working capital requirements; production, mineral
reserves and resources and metallurgical recoveries; the impact of
acquisitions, dispositions, suspensions or delays on our business;
and the ability to achieve our goals. In particular, except where
otherwise stated, we have assumed a continuation of existing
business operations on substantially the same basis as exists at
the time of this release.
Even though our management believes that the
assumptions made and the expectations represented by such
statements or information are reasonable, there can be no assurance
that the forward-looking statement or information will prove to be
accurate. Many assumptions may be difficult to predict and are
beyond our control.
Furthermore, should one or more of the risks,
uncertainties or other factors materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements or information.
These risks, uncertainties and other factors include, among others:
the ratification of the Agreement, including the timing thereof,
the ability to achieve the expected benefits of the Agreement, the
ability to complete advancement of technical work and construction
at Skouries, including securing financing, and meeting production
and cost guidance, and ability to move into production, and the
timing thereof, ability to meet production and cost guidance,
global outbreaks of infectious diseases, including COVID-19; timing
and cost of construction, and the associated benefits; recoveries
of gold and other metals; geopolitical and economic climate (global
and local), risks related to mineral tenure and permits; gold and
other commodity price volatility; information technology systems
risks; continued softening of the global concentrate market; risks
regarding potential and pending litigation and arbitration
proceedings relating to our business, properties and operations;
expected impact on reserves and the carrying value; the updating of
the reserve and resource models and life of mine plans; mining
operational and development risk; financing risks; foreign country
operational risks; risks of sovereign investment; regulatory risks
and liabilities including environmental regulatory restrictions and
liability; discrepancies between actual and estimated production;
mineral reserves and resources and metallurgical testing and
recoveries; additional funding requirements; currency fluctuations;
community and non-governmental organization actions; speculative
nature of gold exploration; dilution; share price volatility and
the price of our common shares; competition; loss of key employees;
and defective title to mineral claims or properties, as well as
those risk factors discussed in the sections titled
“Forward-Looking Statements” and "Risk factors in our business" in
the Company's most recent Annual Information Form & Form 40-F.
The reader is directed to carefully review the detailed risk
discussion in our most recent Annual Information Form filed on
SEDAR and EDGAR under our Company name, which discussion is
incorporated by reference in this release, for a fuller
understanding of the risks and uncertainties that affect the
Company’s business and operations.
The inclusion of forward-looking statements and
information is designed to help you understand management’s current
views of our near- and longer-term prospects, and it may not be
appropriate for other purposes.
There can be no assurance that forward-looking
statements or information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, you should not place
undue reliance on the forward-looking statements or information
contained herein. Except as required by law, we do not expect to
update forward-looking statements and information continually as
conditions change.
Except as otherwise noted, scientific and
technical information contained in this press release was reviewed
and approved by Simon Hille, FAusIMM and VP Technical Services for
the Company, and a "qualified person" under NI 43-101.
_____________________
1 Requires permit approval for use of dry-stack tailings
technology at Skouries. 2 Requires EIA modification.All dollar
amounts are expressed in US dollars unless otherwise noted.3 The 2%
royalty at $1,300 gold would become a 2.2% royalty.
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